The Employment Report is a report put out by the Bureau of Labor Statistics once per month. The Employment Report can provide a lot of information to traders and provide “trader how to” in a sense because it provides the most accurate, broad and timely reporting of the economic activity and health of the economy. It can be used with a wide variety of indicators from Fibonacci Retracement, to Moving Averages. Employment data sending mixed messages offers excellent info on this.
The Employment Report allows traders to make educated decisions about how to trade. The Employment Report provides data on almost all sectors of the economy and is a valuable trading tool. The report consists of two different reports that combine the data found in two surveys done independently one of another.
The Household Survey is a survey taken of approximately 60,000 household that equates to almost 120,000 people. This gives information about the unemployment rates and much of the economy and trading runs on unemployment rates. Unemployment rates tell us about job creating, growth, expansion in companies, etc. People who are technically unemployed are those who do not have job and are not actively seeking jobs.
The other survey conducted in the Establishment or Payroll Survey. This survey samples 375,000 companies that report the payrolls, average workweek length, and approximate hourly earnings. This tells traders the state of companies, if there is growth or stagnation, and the health of companies in the economy. The payrolls are divided into categories such as manufacturing, mining, construction, service sector, and government. Manufacturing is the sector of business that typically leads the markets but depending on the area of the market you have a particular interest in, you want to follow different sectors.
The average workweek length can be a deciding factor because it indicates the levels of manufacturing production and personal income people in the market have which correlates to spending power. In this way, the Employment Report can tell other sectors of the market, like the retail market, how healthy their market is.
With each report come market changes. The payrolls and unemployment rates have direct results on the fixed income and equities markets as well as the strength of the dollar. For instance, if the payroll employment is up, the bond market heads down, stock markets go up and the strength of the dollar goes up because there are more people working, more exports available and companies are performing well. These are just some ways the Employment Report can help you as a trader determine market strength.